REG - Nostrum Oil & Gas - Operational Update for 3Q and 9M

Nostrum Oil & GasAnnouncement

27/10/2023 07:15

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RNS Number : 4648R  Nostrum Oil & Gas PLC  27 October 2023

 

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF THAT JURISDICTION

 

FOR IMMEDIATE RELEASE

 

 

London, 27 October 2023

 

 

Operational Update for the third quarter and nine months ended 30 September
2023

 

Nostrum Oil & Gas PLC (LSE: NOG) ("Nostrum", or the "Company" and together
with its subsidiaries, the "Group"), an independent oil and gas company
engaging in the production, development and exploration of oil and gas in the
pre-Caspian Basin, today announces its operational update in respect of the
third quarter and nine months ended 30 September 2023.

 

 

9M 2023 Highlights:

 

Operational

·      Daily production after treatment averaged 10,288 boepd (9M 2022:
13,684 boepd).

 

·      Daily sales volumes averaged 9,096 boepd (9M 2022: 12,780 boepd).

 

·   On 29 September 2023, the Company announced the commencement of the
appraisal campaign at the Stepnoy Leopard fields. The objective of the
appraisal campaign is to re-enter two existing wells in the Teplovskoye
reservoir to take representative fluid samples and conduct Extended Well
Testing. The data will help to confirm the commercial potential and support
the future decision related to the selection of a phased field development
concept in 2024.

 

·    On 4 September 2023, the successful completion of the re-start of
Nostrum's c.$750 million state-of-the-art GTU-3 gas plant, with 2.5 billion
cubic metres per annum gas processing capacity was announced. The Company
completed the modifications and other works on GTU-3 subsequent to its
commissioning and start-up in 2019. The plant employs cutting-edge
turbo-expander technology enabling improved efficiency in the extraction of
LPG; the upgrades also reduced the plant operating turndown capacity.  GTU-3
is operating as per design and delivering dry gas, LPG, and condensate to
sales specifications.

 

·    On 22 August 2023, the Company also announced that its Board of
Directors approved a limited-scale drilling programme for the Chinarevskoye
field to be executed over 2023-2024, which is in line with the commitments of
the Company's subsidiary Zhaikmunai LLP under the analysis of the Field
Development Plan and obligations under its production sharing agreement for
the field. The programme will leverage existing wellbores to reduce costs and
carries a level of uncertainties and risks as the planned subsurface targets
contain multiple exploration, appraisal, and development objectives.

 

·    On 23 July 2023, the Group announced the successful launch of the
expansion of its Gas lift system with the new compressor doubling its capacity
and helping to slow down production decline from its maturing Chinarevkoye
field. The initial production gains exceed management's expectations.

 

·   The Group continues its well and reservoir management strategy through
well workovers and rigless well intervention in 2023.

 

·     The Group is progressing with a tie-back project, budgeted for
c.US$5m of capital expenditures. It will allow for the first ever third-party
feedstock from Ural Oil & Gas LLP ("Ural OG") to be received for treatment
in the Group's facilities.

 

·     Whilst not itself a target of sanctions imposed in connection with
the conflict in Ukraine, Nostrum continues to monitor the current and evolving
lists of individuals, entities and products that are subject to sanctions with
a view to compliance by the Group with all applicable sanctions and to
ensuring that the Group's ongoing activities are not materially affected by
such sanctions.

 

·  Safety of all staff and contractors as well as focus on conducting
sustainable operations remain the Group's priority.

 

 

Financial

·   9M 2023 revenues expected to be in excess of US$88m (9M 2022:
US$155.5m).  Decrease in revenues compared to 9M 2022 resulted from
relatively lower average product prices (average Brent oil price of
US$81.9/bbl for 9M 2023 vs US$102.5/bbl for 9M 2022) and declining production.
9M and full year 2023 sales and revenues remain in line with management's
targets and expectations.

 

·     The Group's unrestricted consolidated cash balance as at 30
September 2023 was in excess of US$171m (30 June 2023: US$192m). The
restricted cash balance was in excess of US24m as at 30 September 2023 (30
June 2023: US$16.3m). The next semi-annual loan note cash interest payment is
scheduled for December 2023.

 

·     The Group continues to focus on cost optimisation to help manage
liquidity.

 

 

Sustainability

·     Zero fatalities among employees and contractors during operations
for the 9M 2023 (9M 2022: zero).

 

·     Zero Lost Time Injury ("LTI") for the 9M 2023 (9M 2022: zero)

 

·     One Total Recordable Incidents ("TRI") for the 9M 2023 (9M 2022:
four).

 

·   3,347 tonnes of air emissions emitted for the 9M 2023 against 6,309
tonnes permitted for 2023 under the Kazakhstan Environmental Code.

 

 

Arfan Khan, Chief Executive Officer of Nostrum Oil & Gas, commented:

 

"Nostrum has continued to make significant progress during this reporting
period.

 

The appraisal campaign at the Stepnoy Leopard fields and the re-start of our
GTU-3 gas plant demonstrated the strength and improved efficiency of our
operations. We are also confident about the production value created by the
limited-scale drilling programme for the Chinarevskoye field and the expansion
of our Gas lift system.

 

We remain focused on delivering on our multi-asset energy strategy, supported
by our combined 4.2 bcma gas process infrastructure in North-western
Kazakhstan, and will build on this momentum to unlock further opportunities
for all our stakeholders."

 

 

Sales volumes

The sales volume split for the 9M 2023 was as follows:

 Products                    9M 2023   9M 2023       9M 2022   9M 2022

                             volumes   product mix   volumes   product mix

                             (boepd)    (%)          (boepd)    (%)
 Crude Oil                   2,731     30.0%         2,926     22.9%
 Stabilised Condensate       1,963     21.6%         3,080     24.1%
 LPG (Liquid Petroleum Gas)  1,325     14.6%         1,778     13.9%
 Dry Gas                     3,077     33.8%         4,996     39.1%
 Total                       9,096     100.0%        12,780    100.0%

 

The difference between production and sales volumes is primarily due to the
internal consumption of gas.

 

 

Release of Nostrum's 9M 2023 Financial Results

Nostrum plans to release its unaudited and unreviewed interim condensed
consolidated accounts for the period ending 30 September 2023 on 21
November 2023.

 

 

LEI: 2138007VWEP4MM3J8B29

 

Further information

For further information please visit www.nostrumoilandgas.com
(http://www.nostrumoilandgas.com)

 

Further enquiries

Nostrum Oil & Gas Plc

 

Petro Mychalkiw

Chief Financial Officer

ir@nog.co.uk (mailto:ir@nog.co.uk)
 
 

 

Instinctif Partners -
UK
 

Guy Scarborough

Vivian Lai

+ 44 (0) 207 457 2020

nostrum@instinctif.com (mailto:nostrum@instinctif.com)

 

 

About Nostrum Oil & Gas

Nostrum Oil & Gas PLC is an independent oil and gas company currently
engaging in the production, development and exploration of oil and gas in the
pre-Caspian Basin. Its shares are listed on the London Stock Exchange (ticker
symbol: NOG) and the Astana International Exchange (ticker symbol: NOG). The
principal producing asset of Nostrum Oil & Gas PLC is the Chinarevskoye
field, which is operated by Zhaikmunai LLP, a wholly-owned subsidiary of
Nostrum Oil & Gas PLC and the sole holder of the subsoil use rights with
respect to the development of the field.

 

Forward-Looking Statements

Some of the statements in this document are forward-looking. Forward-looking
statements include statements regarding the intent, belief and current
expectations of the Company or its officers with respect to various matters.
When used in this document, the words "expects", "believes", "anticipates",
"plans", "may", "will", "should" and similar expressions, and the negatives
thereof, are intended to identify forward-looking statements. Such statements
are not promises nor guarantees and are subject to risks and uncertainties
that could cause actual outcomes to differ materially from those suggested by
any such statements.

 

No part of this announcement constitutes, or shall be taken to constitute, an
invitation or inducement to invest in the Company or any other entity, and
shareholders of the Company are cautioned not to place undue reliance on the
forward-looking statements. Save as required by the relevant listing rules and
applicable law, the Company does not undertake to update or change any
forward-looking statements to reflect events occurring after the date of this
announcement.

 

 

 

 

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